More Bad News for PA: Gov. Corbett Announces $2 Billion Budget Hole
PA Hits the Trifecta: Budget Crisis Matches Education Crisis and Job Crisis
On December 3rd, PA Governor Tom Corbett’s Budget Secretary, Charles Zogby, provided an update on PA’s finances and the news was grim. Pennsylvania faces a budget deficit of $2 billion in the next fiscal year.
The cause of the problem is simple: Over the past four years, the Governor and Republican-controlled legislature provided over $2.3 billion in tax breaks and giveaways to some of PA's wealthiest corporations. They chose not to invest in putting people to work in PA or to invest in our education system. They also failed to implement tax fairness by making sure that the Marcellus Shale industry paid a modest severance tax (which at a 5% rate would have totaled about $2.4 billion in new dollars to PA). These decisions have provided a cumulative tax give-away of over $4.7 billion to some of the biggest corporations in the world.
These tax giveaways and poor fiscal choices caused the $1 billion cut in basic education funding which triggered the academic performance of our schools to plummet. PA was once the only state in the nation where test scores went up for every grade level and every subject matter for even the toughest academic environments. That is no longer the case. This combined with dramatic local property tax increases has seriously hurt PA schools and the students who attend them, and the families that support them.
PA's jobs picture is even worse. Four years ago PA was 7th in the nation in new job creation. PA is now 50th in the nation in new job creation. If PA had matched the job growth that the nation experienced over the past four years, nearly another 250,000 PA residents would have jobs right now. Additionally, PA is last in the seven state region of New York, New Jersey, Delaware, Maryland, West Virginia, and Ohio in private sector job creation.
Finally, PA has fallen far behind on the issue of wage disparity and wage stagnation. Because we have not raised PA's minimum wage and we have not created the number of new jobs that we should have, PA families are having an increasingly more difficult time in making ends meet. The 23 other states who have increased the minimum wage above the federal level have seen increased economic activity. The result is increased pressure on PA's middle income families to make ends meet and to invest in their future.
The recent budget news only confirms what was made clear from the education and jobs problems: The policy decisions of the current Governor and Republican-controlled legislature have put PA residents in a VERY difficult place. The work to get out of this problem will be challenging, but we know at least one thing: We cannot continue down the same path that led us to this place. We must go in a different direction and Pennsylvania’s school children, families, and residents who want to work, or who are already working and who want to make a family sustaining wage, must be at the center of A new direction and fresh start.
Building for the future of Pa. cannot occur if we continue to repeat the failed policies of the past four years.
State Senator Vincent Hughes
IN THE NEWS
It’s Official: Zogby Confirms $2 Billion Budget Gap
December 3, 2014 | By Michael Wood
Budget Secretary Charles Zogby confirmed today during his final mid-year budget briefing that Pennsylvania will face a $2 billion budget gap next year. After balancing the 2014-15 spending plan with one-time resources, Secretary Zogby acknowledged that crafting a 2015-16 budget will be difficult for the next administration. This sentiment echoes what the Independent Fiscal Office (IFO), bond-rating agencies, and others (including we here at PBPC) have been saying for months. » Continue Reading
Wolf fires salvo over projects $2 billion budget
December 3, 2014 | By Brad Bumsted
YORK — The state's projected budget deficit of at least $2 billion is “obscenely high” and built on an “orgy of one-time transfers” that is untenable, Democratic Gov.-elect Tom Wolf said Wednesday.
Pennsylvanians understand it's a crisis, Wolf said at a news conference in his hometown, adding he won't know the full scope of the problem until he takes office. » Continue Reading
State budget realities show $2 billion deficit
December 3, 2014 | By Karen Langley and Kate Giammarise
YORK, Pa. — After campaigning on a plan to increase education funding, Gov.-elect Tom Wolf and his Democratic allies worked hard Wednesday to lay the budgetary pressures that will face his administration squarely at the feet of outgoing GOP Gov. Tom Corbett.
“I do not want to go into this with anybody being under the misapprehension that somehow I caused this,” Mr. Wolf said at a news conference following the Corbett administration’s mid-year budget briefing. “I want to make sure we’re all in agreement that I’m inheriting a big problem here.” » Continue Reading
State official: “Reality check” looms for state budget
December 3, 2014 | By Angela Couloumbis and Amy Worden
HARRISBURG - A top official with the outgoing Corbett administration and incoming Gov.-elect Tom Wolf agree on this much: The state will head into 2015 with a roughly $2 billion shortfall looming for next year's budget.
But while Budget Secretary Charles Zogby pointed to sluggish revenues and increasing costs, Wolf blamed it on Gov. Corbett's "failed ideology." » Continue Reading
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Offices of State
Senator Vincent Hughes